Cornerstone Investment Partners with AdvisorShares launched an actively managed small-capitalization exchange traded fund that could potentially capitalize on cheap valuations in small-cap stocks with improving fundamentals.
The AdvisorShares Cornerstone Small Cap ETF (NYSEArca: SCAP) is an actively managed ETF that will try to provide long-term capital appreciation and current income. SCAP comes with a 0.80% net expense ratio.
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Cornerstone Investment partners will act as the sub-advisor to the fund. The registered investment advisor uses an investment valuation model based on financial theory and strong statistical merit to identify stocks they it believes are undervalued, according to Cornerstone. They strive to provide outperformance while diminishing downside risk.
SCAP will target U.S. equities that are smaller than the largest components in the Russell 2000 index but will exclude the smallest 200 stocks of the benchmark. Moreover, securities are equally weighted within the sectors.[related_stories]